Saturday, December 20, 2025
THE CENTRAL BANK REASSURES: COMPREHENSIVE REFORMS AND A SWIFT RETURN OF BANKS DEPRIVED OF DOLLARS
THE CENTRAL BANK REASSURES: COMPREHENSIVE REFORMS AND A SWIFT RETURN OF BANKS DEPRIVED OF DOLLARS
The Central Bank of Iraq reassured the public on Tuesday (December 2, 2025) regarding the ongoing banking reforms, stressing that rebuilding the banking sector is the main pillar of its work at the present stage, during a session attended by a number of experts and specialists.
The bank said in its statement, received by “Baghdad Today”, that its governor, Ali Mohsen Al-Alaq, presented an extensive proposal for the reform plan, explaining that the contract with Oliver Wyman came after the restrictions imposed on a number of banks dealing in dollars, with the aim of implementing comprehensive reforms that ensure their compliance with international standards, noting that there are assurances that those banks will return to their normal environment after the completion of the reform stages.
The statement added that all Iraqi banks have signed the reform document, indicating that compliant banks will be granted the ability to deal in other currencies in gradual steps, while confirming that international bodies are directly monitoring the progress of work on this file.
He added that the digital dinar project is still under implementation and requires time and integrated infrastructure before it can be officially launched.
The bank noted that Al-Alaq reiterated the commitment to maintaining overall price stability by fixing the exchange rate and keeping inflation at low levels, warning that reducing the dinar’s exchange rate would have negative repercussions on low-income groups and weaken confidence in the national currency.
The statement concluded by stressing the need to avoid using the exchange rate as a tool to address the structural deficit, emphasizing the need for structural reforms to maximize revenues, control expenditures, and diversify the economy, while supporting the government’s directions in this area.
MILITIAMAN & CLARE: 🌍 Iraq’s Currency Revolution & Global Shift | Militia Man, U.S.–Iraq Partnership Signals
📌 Introduction: A New World for Iraq and the Global Financial System
According to Militia Man, Iraq is not just adjusting its currency—it is preparing to enter a completely different financial world, one that aligns with global transformation, digital finance, and tokenized currencies.
At the same time, recent diplomatic developments highlighted by Clare suggest that Iraq’s international positioning—especially with the United States—is fundamentally changing.
Together, these developments point to structural, not cosmetic, change.
💱 Iraq’s Currency Revolution: More Than a Rate Change
Militia Man framed Iraq’s monetary evolution as part of a broader global shift, stating:
“We’re going into a different world with the Iraqi dinar, and we’re going into a different world with the globe.”
Key Themes Highlighted:
Tokenized currencies are coming
Executive orders related to financial systems matter
- Monetary reform will happen on their time, not on speculation timelines
Transparency will come after implementation, not before
This perspective emphasizes process over prediction.
🏦 100% Banking Compliance Is Non-Negotiable
One of Militia Man’s strongest points was banking readiness.
He stressed that:
All Iraqi banks must be 100% compliant
Partial compliance is not acceptable
This aligns with:
International banking standards
AML / KYC requirements
Cross-border settlement systems
This requirement explains why reform takes time and why completion matters more than speed.
🪙 Tokenized Currencies & Executive Orders
Militia Man connected Iraq’s progress to:
Tokenization of assets and currencies
Digitization of settlement systems
Executive orders that support systemic financial change
His takeaway:
These things should be taken seriously.
This places Iraq’s reform within the context of a global monetary reset toward digital and asset-backed systems, rather than an isolated national event.
🇺🇸 Diplomatic Signals: Trump Acknowledges U.S. Envoy to Iraq
Article Highlighted by Clare:
“At Christmas Party, Trump Publicly Acknowledges U.S. Envoy to Iraq”
During the 2025 White House Christmas Party, President Trump publicly acknowledged Mark Savaya, the U.S. envoy to Iraq.
Savaya later wrote on X:
“President Trump, thank you for your kind acknowledgment… Merry Christmas and may God bless you and the United States of America.”
This brief moment drew attention within diplomatic circles, signaling:
Continued high-level engagement
Strategic importance of the U.S.–Iraq relationship
🤝 From Conflict to Partnership: A Major Shift
Another article cited by Clare reinforces this shift.
Article:
“The Iraqi government told Shafaq News: The relationship with Washington has moved from ‘conflict’ to ‘partnership’”
Key statement from Farhad Ala’addin, Prime Minister’s Advisor for Foreign Affairs:
The U.S. decision to revoke the authorization to use force against Iraq confirms Iraq is fully sovereign and marks a shift from conflict to partnership.
Why This Matters:
Signals normalization of relations
Reinforces Iraqi sovereignty
Creates a more stable environment for:
Investment
Banking reform
Monetary confidence
⭐ Featured Snippet: Key Takeaways
Iraq’s Current Direction
Currency reform aligned with global tokenization
100% banking compliance required
Reform will occur on official timelines
U.S.–Iraq relations shifting to partnership
Sovereignty and stability reinforced
❓ Q&A – Common Questions
Q: Is Iraq moving toward digital or tokenized currency systems?
A: According to Militia Man, yes—aligned with global trends.
Q: Why is bank compliance so important?
A: International integration requires full regulatory compliance.
Q: Does U.S. acknowledgment signal political support?
A: It suggests continued strategic engagement and partnership.
Q: Is this just about the dinar?
A: No. This is about systemic financial transformation.
🔍 Why This Update Is Significant
When you combine:
Monetary reform
Banking compliance
Tokenization trends
Diplomatic normalization
You see alignment across financial, political, and international layers.
This is not random—it is structural.
🏁 Final Thoughts
Militia Man’s message is clear:
The change is real
The scope is global
The timing is controlled
The foundation must be solid
And as Clare’s articles show, Iraq is positioning itself as a sovereign partner, not a conflict zone.
Transformation favors preparation—not speculation.
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Militia Man
Iraq's currency revolution...We're going into a different world with the Iraqi dinar and we're going into a different world with the globe. We know we have tokenized currencies that are coming. We've seen executive orders being placed and those things should be taken seriously.
The bottom line is they're going to show you how they're going to do it on their time. We don't know exactly when that's going to happen...One thing for sure, all of Iraq's banks will need to be compliant 100%...
Clare
Article: "At Christmas Party, Trump Publicly Acknowledges U.S. Envoy to Iraq"
Quote: "A brief but pointed acknowledgment by U.S. President Donald Trump of America’s envoy to Iraq, Mark Savaya, during the White House’s 2025 Christmas party has drawn attention in diplomatic and political circles...In a post on X dated Dec. 19, 2025, Savaya publicly thanked President Trump for recognizing him during the White House Christmas gathering, writing: 'President Trump, thank you for your kind acknowledgment at the 2025 White House Christmas party. You are truly the greatest president this country has ever had. Merry Christmas and may God bless you and the United States of America.' ”
Article: "The Iraqi government told Shafaq News: The relationship with Washington has moved from 'conflict' to 'partnership' ".
Quote: "The Prime Minister’s Advisor for Foreign Affairs, Farhad Ala’addin, affirmed on Thursday that the United States’ decision to revoke the authorization to use force against Iraq confirms that the country is now fully sovereign and signifies a shift in the relationship from 'conflict' to 'partnership.' "
SAMIR AL-NASSIRI: THE BANKING REFORM PLAN IS BEING IMPLEMENTED SUCCESSFULLY ACCORDING TO ITS TIMETABLE
SAMIR AL-NASSIRI: THE BANKING REFORM PLAN IS BEING IMPLEMENTED SUCCESSFULLY ACCORDING TO ITS TIMETABLE
Banking consultant and expert Samir Al-Nassiri confirmed that the Central Bank, Oliver Wyman, and other banks are continuing to implement the standards of the banking reform plan in partnership and daily coordination, according to the plan’s timeline, which was launched on April 7, 2025.
The Central Bank published the project implementation mechanisms and the banks signed an agreement to comply with the plan. Preparations are now underway to launch the first evaluation cycle during the first quarter of 2026.
The procedures and efforts undertaken by the Central Bank of Iraq, in cooperation and consultation with the consulting firm and private banks, have resulted in tangible steps during the current quarter in facilitating the implementation of the objectives, programs, mechanisms and standards of the comprehensive banking reform project, within the framework of implementing the Central Bank’s third strategy.
He explained that the main objective of this project is to build a sound, modern, comprehensive and flexible banking sector that contributes to achieving rapid growth in the national economy, a cumulative increase in GDP, and enhancing the market value of the banking sector.
Al-Nassiri pointed out that economic reform begins with banking reform, explaining that the challenges facing the Iraqi economy simultaneously present significant opportunities to reform and develop the banking and financial sector, in line with the government’s program and the Central Bank’s future vision. He added that the banking sector will play a pivotal role in achieving sustainable development and attracting investments, as well as supporting ongoing efforts to activate non-oil productive sectors with the aim of diversifying national income sources and ensuring financial sustainability and balanced economic growth.
Al-Nassiri explained that the role of the Central Bank is also embodied in regulating the financing of foreign trade and implementing infrastructure projects related to comprehensive digital transformation, in addition to expanding the use of electronic payment tools in a way that enhances the achievement of financial inclusion.
He stressed that these efforts will contribute to providing real opportunities for reforming, developing and empowering the private banking sector during the period 2025–2028, through a set of key objectives, most notably:
* Developing the Iraqi banking system to keep pace with internationally approved banking and accounting standards.
* Building a sound, modern, comprehensive and flexible banking sector capable of adapting to economic changes.
* To enhance citizens’ confidence in the local banking sector and achieve international recognition of its transparency, progress, and commitment to international standards, thereby strengthening the confidence of global correspondent banks in dealing with it.
* Rehabilitating restricted or weakly active banks to enable them to return to the banking market with their full internal and external activities.
* Refocusing the role of banks on their core function of financing and lending for development, while promoting financial inclusion and increasing its rate in accordance with the established plans.
* To promote the transition from a cash economy to a digital economy by attracting funds circulating outside the banking system, which represent about 90% of the money supply, and bringing them into the formal banking cycle.
Al-Nassiri explained that although the period specified for their implementation according to the banking reform project and the Central Bank’s strategy extends to three years, what was achieved during the years 2023, 2024 and 2025 is considered an important achievement, as solid foundations and rules were built that formed the main pillar for the desired reform path.
He added that these achievements will contribute to the process of evaluating and classifying Iraqi banks based on the extent to which they achieve the goals set within the banking reform project, in accordance with the approved international standards and criteria.
🇮🇶 Frank26: Iraq’s Dinar Education Is Complete — Purchasing Power Is the Promise
📌 Introduction: “It’s Not a Secret Anymore”
According to Frank26, what is happening with the Iraqi dinar is no longer hidden—at least not inside Iraq.
What is surprising, he notes, is that only a small percentage of people in the United States truly understand or even follow the Iraqi dinar story.
That raises an interesting question:
Who are the people that actually hold dinars—and why?
Frank26’s commentary focuses less on dates and rates, and more on something far more important in his view: education.
📚 A Full Year of Education Inside Iraq
Frank26 emphasized that the entire year was used for one primary purpose:
👉 Educating Iraqi citizens on what is coming next for their currency.
He explained that:
Promises have not been forgotten
They simply have not been fulfilled yet
The groundwork had to come first
That groundwork is what he refers to as Asraflak.
🗣️ What Is “Asraflak”?
In Frank26’s explanation, Asraflak represents:
Public education
Financial awareness
Repeated messaging from:
The CBI (Central Bank of Iraq)
The GOI (Government of Iraq)
Prime Minister Sudani
He noted that Asraflak is:
Getting clearer
Getting louder
Becoming more consistent every day
This is not accidental—it is preparation.
🏛️ The Message from Sudani, CBI & GOI
Frank26 asked a series of rhetorical questions during his commentary:
❓ What did Sudani promise the people?
Purchasing power.
❓ What did the CBI say all year?
We are lifting the three zeros to add value to our currency.
❓ When will it happen?
The response given to citizens:
None of your business.
But the key point, according to Frank26, is this:
They never said “if.” They said “when.”
💱 Lifting the Three Zeros: Meaning & Intent
Frank26 reiterated that:
Lifting the three zeros is about adding value
It is not about:
Deleting wealth
Confiscation
Devaluation
Instead, the consistent message has been:
Increased purchasing power
A stronger national currency
A prepared population
⭐ Featured Snippet: Frank26 Key Insight
Frank26 on the Iraqi Dinar
Iraq spent a full year educating citizens
The process is called Asraflak
Sudani promised purchasing power
CBI confirmed lifting the three zeros
The timing is undisclosed—but the intent is clear
❓ Q&A – Common Questions
Q: Is this information classified or secret?
A: According to Frank26, no. Inside Iraq, this messaging is public and consistent.
Q: Why doesn’t the CBI give a date?
A: Frank26 suggests timing is strategic, not uncertain.
Q: What is the goal of lifting the zeros?
A: To add value and increase purchasing power, not reduce it.
Q: Why focus so much on education?
A: Because monetary reform without public understanding leads to instability.
🔍 Why This Perspective Matters
Frank26’s analysis highlights something often overlooked:
Monetary reform is as much psychological as financial
Education builds:
Confidence
Stability
Acceptance
In his view, Iraq is no longer asking its people if change is coming—but preparing them for when it arrives.
🏁 Final Thoughts
Frank26 summed it up simply:
The promise was made
The education was delivered
The intent was declared
What remains is execution.
And according to him, that part has never been abandoned—only timed.
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Frank26
Feel good because it's not a secret. Everybody knows. What I find interesting is only a small percentile of the United States of America's population knows about the Iraqi dinar. Only a small percentile. I can't help but to wonder who are the people that have dinars
The whole freaking year was used to educate them on what they're about to do. Promises have not been forgotten because they have not been met yet. The education of the Iraqi dinar to the citizens is called Asraflak. The Asraflak is getting clearer...louder every day.
What was it that the CBI, GOI and Sudani told them all year?
What did Sudani promise?
Purchasing power. What did the CBI say?
We're lifting the three zeros to add value to our currency. When?
None of your business. Ok, fine. But you're doing it, huh? Yep.
🇮🇶 Iraq After the 2025 Elections: Political Power Shifts, Reform Challenges & What Comes Next
📌 Introduction: A Critical Turning Point for Iraq
Following Iraq’s 2025 parliamentary elections, the country finds itself at a decisive crossroads.
An expert panel hosted by Joshua Yaf at the Center for the National Interest examined the political, economic, and structural realities shaping Iraq’s future.
While the elections were conducted peacefully—an achievement in itself—the aftermath reveals deep-rooted systemic challenges, shifting power dynamics, and mounting socio-economic pressures that will define Iraq’s trajectory for years to come.
🗳️ Election Results & Power Distribution
Key Outcomes
Muhammad Shia al-Sudani’s coalition
Officially won 46–47 seats
Directly controls fewer than 16 seats
Pro-Iranian / anti-Western factions
Expanded dramatically
From ~17 seats in 2021 to 80–90 seats in 2025
Coordination Framework (Shia alliance)
Remains the dominant political force
Likely to select the next prime minister
What This Means
Parliamentary influence is fragmented, while real power remains concentrated within elite political alliances, reducing accountability and limiting genuine reform.
🏛️ Government Formation & the Muhasasa System
Iraq’s political system continues to operate under the Muhasasa system, an informal sectarian power-sharing framework.
Characteristics of the System:
Ensures inclusion of Shia, Sunni, and Kurdish blocs
Diffuses responsibility and accountability
Encourages patronage over performance
According to panelists:
The next prime minister is likely to function as an “employee” of the coordination framework
Structural reform is constrained by elite resistance
Political competition has shifted from inter-sectarian to intra-sectarian rivalries
🟨 Kurdish Political Crisis
The Kurdistan Regional Government (KRG) faces its own internal turmoil:
Ongoing divisions between:
Kurdistan Democratic Party (KDP)
Patriotic Union of Kurdistan (PUK)
Delays in:
KRG formation
Federal government formation
Weakening of traditional Kurdish power-sharing agreements
These divisions risk undermining:
Kurdish leverage in Baghdad
The Kurdish-held Iraqi presidency
Long-term regional stability
⚠️ Reform, Accountability & Public Disillusionment
Marginalization of Reform Movements
Post-2019 protest movements (e.g., Tishreen) have been:
Co-opted
Neutralized
Politically sidelined
Structural Barriers
Entrenched elites resist reform
Elections avoided serious debates on:
Economic restructuring
Fiscal discipline
Public expectations for jobs and services continue to rise
💰 Economic & Fiscal Challenges
Iraq faces mounting economic pressure:
Core Issues
Lack of short-term and long-term economic planning
Repeated fiscal crises (2014, 2020) met with populist responses
Continued reliance on:
Oil revenues
Public-sector employment
Consequences
Shrinking fiscal space
End of “unlimited spending”
Strong public resistance to austerity measures
🌍 Emerging Existential Challenges
Climate & Water
Climate change and water scarcity threaten:
Agriculture
Rural livelihoods
Food security
Demographics
~60% of Iraq’s population is under 20
High demand for:
Jobs
Education
Public services
Failure to meet expectations risks instability
Energy Transition & AI
Global energy transition challenges Iraq’s oil dependency
Artificial intelligence reshapes labor markets faster than policy adaptation
🌐 Foreign Influence: Iran vs. the U.S.
Iranian Influence
Iran retains deep influence through:
Militias
Political factions
Provincial governance
Iranian-aligned actors control key security and administrative roles
Iraqi elites often rely on Iran during internal crises
U.S. Influence
U.S. presence is declining
Troop withdrawal expected to complete by end of 2026
Kurdish leaders express concern over reduced U.S. engagement
⭐ Featured Snippet: Iraq Post-2025 Snapshot
Iraq After the 2025 Elections
Parliament convenes: December 29, 2025
Pro-Iranian factions gain major influence
Government formation may take up to a year
Economic, climate, and demographic pressures rising
Reform constrained by sectarian power-sharing
❓ Q&A – Key Questions Answered
Q: Did the 2025 elections change Iraq’s political system?
A: No. They reinforced the existing sectarian power-sharing structure.
Q: Who really controls government formation?
A: The Shia-led coordination framework, not parliament alone.
Q: Why is reform so difficult?
A: Elite resistance, patronage systems, and public opposition to painful economic reforms.
Q: Is foreign influence decreasing?
A: It is shifting—less direct U.S. influence, continued strong Iranian leverage.
🔍 Timeline of Key Events
Nov 17, 2025 – Supreme Federal Court limits Sudani’s powers (caretaker role)
Dec 29, 2025 – New parliament convenes
2025–2026 – Lengthy government formation process
By end of 2026 – Completion of U.S. troop withdrawal
🧠 Key Insights
Power-sharing prevents domination but limits accountability
Pro-Iranian factions are stronger than ever
Economic and environmental crises are accelerating
Kurdish disunity weakens national influence
Iraq’s future depends on internal political maturity
🏁 Final Thoughts
The 2025 elections highlight both progress and fragility. While Iraq avoided widespread violence at the polls, the post-election reality underscores enduring structural weaknesses.
True stability will not come from external actors, but from:
Accountability
Merit-based governance
Economic realism
Inclusive national dialogue
Iraq’s challenge is no longer just survival—but evolution.
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Summary: Iraq Since the 2025 Elections – Political Dynamics and Challenges
This expert panel discussion, hosted by Joshua Yaf at the Center for the National Interest, focuses on the aftermath of Iraq’s 2025 parliamentary elections, the government formation process, and the broader political and socio-economic challenges facing Iraq. The Supreme Federal Court recently certified the election results, with the new parliament slated to convene on December 29, 2025. The government formation process is expected to be lengthy and complex.
Key Political Developments and Dynamics
Election Outcomes and Power Distribution:
- Muhammad Shia al-Sudani’s coalition officially won about 46-47 seats, but he effectively controls fewer than 16 seats directly.
- Pro-Iranian and anti-Western factions gained a significant presence, increasing their parliamentary seats from about 17 in 2021 to 80-90 in 2025, marking a major shift.
- The coordination framework (a Shia political alliance) remains dominant and will likely select the next prime minister, reducing the parliament’s direct influence.
Government Formation and Muhasasa System:
- The Muhasasa system—a sectarian power-sharing arrangement—continues to shape Iraqi politics, emphasizing inclusion but diffusing accountability.
- The next prime minister will likely serve as an employee of the coordination framework rather than an autonomous leader, limiting reform potential.
- Political competition is increasingly intra-community (within Shia, Sunni, Kurdish blocs) rather than inter-community, complicating governance.
Kurdish Political Crisis:
- Internal divisions between the Kurdistan Democratic Party (KDP) and Patriotic Union of Kurdistan (PUK) remain unresolved, delaying both the Kurdistan Regional Government (KRG) formation and national government formation.
- The traditional Kurdish power-sharing arrangement is weakening, raising questions about future influence and representation, including the Kurdish-held Iraqi presidency.
- Kurdish parties are significant beneficiaries of the power-sharing system but face challenges maintaining unity.
Challenges to Reform and Accountability:
- Reform-minded groups and the youth-driven protest movements post-2019 (e.g., Tashin movement) have been marginalized or co-opted.
- The entrenched political elite resist structural reform, and the absence of strong economic policy debates during elections reflects public reluctance to confront painful economic adjustments.
- Fiscal constraints are mounting, ending the era of unlimited government spending, clashing with growing public demand for jobs and services.
Socio-Economic and Structural Challenges
Economic Planning Deficits:
- Iraq lacks both short-term and long-term economic planning; repeated fiscal crises (2014, 2020) were met with populist responses rather than sustainable reforms.
- The rentier state model persists, with heavy reliance on oil revenues and public sector employment, undermining fiscal stability.
- Public resistance to austerity and reform impedes necessary policy changes.
Emerging Critical Issues:
- Climate change and water scarcity represent existential challenges, particularly affecting rural communities and food security.
- The impending energy transition and the rise of artificial intelligence pose strategic imperatives for Iraq’s economy and labor market.
- The youthful demographic (about 60% under 20 years old) amplifies demands for employment and services but also risks instability if unmet.
Foreign Influence and Iraq’s International Relations
Iranian Influence:
- Despite regional setbacks, Iran retains strong influence in Iraq through militias and political factions embedded in local governance.
- Iranian allies control key security and administrative roles in various provinces, ensuring continued leverage regardless of national government composition.
- Iraqi political elites often lean on Iran for internal support during crises, reflecting ongoing dependency.
U.S. Influence:
- U.S. presence and influence are waning; troop withdrawal is ongoing, expected to complete by end of 2026.
- The appointment of Mark Sabaya as U.S. special envoy is seen by Iraqi politicians as lacking political weight and effectiveness.
- Kurdish parties are particularly anxious about diminishing U.S. engagement, which has historically served as a leverage point.
Institutional and Political System Observations
| Aspect | Description |
|---|---|
| Muhasasa System | Informal power-sharing arrangement distributing government positions among sectarian/ethnic groups; diffuses power. |
| Parliamentary Dynamics | Fragmented power with no majority; lack of accountability; political blocs block each other’s initiatives. |
| Constitutional Ambiguities | No clear definition of “largest block”; two-thirds quorum for presidency election institutionalizes power-sharing. |
| Minority Protections | Constitutional safeguards (e.g., two-thirds vote for presidency) aim to prevent majority tyranny but complicate governance. |
| Electoral Law Implications | Seats allocated by province reinforce identity politics; identity-based parties remain dominant. |
Panelists’ Key Recommendations and Conclusions
Need for Accountability and Reform:
- Iraq’s future depends on accountability within political institutions rather than external influence.
- Merit-based public sector appointments are essential to break spoils-based patronage systems.
- Political leaders must prioritize national interests over factional and sectarian competition.
Importance of Dialogue and Inclusion:
- Continued dialogue and cultural exchanges are critical to bridging ethnic and sectarian divides.
- The Kurdish leadership should unite to protect and leverage their position within the power-sharing system.
- Power-sharing arrangements, while imperfect, are necessary given Iraq’s demographic and political realities.
Addressing Economic and Environmental Crises:
- The government must confront fiscal challenges head-on despite unpopularity.
- Preparing for energy transition and technological change requires immediate investment in human capital and infrastructure.
- Climate change mitigation and water resource management are urgent priorities.
Foreign Relations Management:
- Iraq should aim to balance its relationships with Iran and the U.S. to safeguard sovereignty.
- Reliance on external actors for political stability is unsustainable; internal political maturity is crucial.
Timeline of Notable Events Post-Elections
| Date | Event |
|---|---|
| November 17, 2025 | Supreme Federal Court limits Muhammad Shia al-Sudani’s executive powers, reducing him to caretaker status. |
| December 29, 2025 | New Iraqi parliament scheduled to convene. |
| 2025-2026 | Government formation process expected to unfold, possibly lasting up to a year. |
| By end of 2026 | U.S. troop withdrawal from Iraq to be completed. |
Core Concepts and Terms
| Term | Definition / Explanation |
|---|---|
| Muhasasa System | Sectarian power-sharing framework distributing government roles among groups. |
| Coordination Framework | Dominant Shia political alliance controlling government formation decisions. |
| Power-Sharing / Consociationalism | Political system designed to share power among ethnic/religious groups to prevent dominance by any single group. |
| Rentier State | Economy heavily dependent on resource rents, especially oil revenues. |
| Two-Thirds Quorum | Parliamentary requirement to elect the president, institutionalizing minority protections. |
Key Insights
- Iraq’s political landscape remains deeply influenced by traditional sectarian power-sharing, limiting reform and accountability.
- The rise of pro-Iranian factions represents a significant shift in parliamentary power, with implications for Iraq’s foreign relations and internal policy.
- Economic and environmental crises are mounting, but political incentives and public expectations hinder meaningful policy responses.
- Internal Kurdish divisions and unresolved regional governance issues pose additional obstacles to stable government formation.
- Foreign influence from Iran and the U.S. continues but with diminished direct control; Iraq’s sovereignty and political maturity are pivotal for future stability.
- Despite challenges, the peaceful conduct of recent elections marks a positive, if fragile, step in Iraq’s democratic trajectory.
Conclusion
The 2025 elections in Iraq have reaffirmed the entrenched sectarian power-sharing system, with the coordination framework and pro-Iranian factions strengthening their grip on power. Political fragmentation, intra-communal rivalries, and institutional ambiguities hinder effective governance and reform. Meanwhile, Iraq faces critical socio-economic challenges, including fiscal constraints, climate change, and a youthful population demanding jobs and services. Foreign influence, particularly from Iran and the U.S., remains significant but is waning in direct impact. The path forward requires Iraq’s political actors to balance power-sharing with accountability, prioritize economic and environmental reforms, and foster inclusive dialogue to navigate the country’s complex realities.
Ultimately, Iraq’s future depends on internal political maturity and the ability of its leaders to transcend sectarian divides and external dependencies while addressing urgent domestic challenges.
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